Better-than-expected retail data spurs market optimism

Brazil’s retail sales grew by 3.4 percent in August — the fourth consecutive positive month — according to the National Confederation of Commerce. The new numbers led the organization to review its 2020 forecast for the sector, from a plunge of 5.7 to a more moderate drop of 4.2 percent. 

Excluding car sales and construction materials, retail performance in 2020 would be 2.1 percent above 2019 levels.

Numbers for August broke the previous October 2014 record, meaning now the sector is down by a mere 0.9 percent in the year-to-date comparison. Official data showed a quick recovery in non-essential items such as textiles and apparel, which grew by 30 percent versus July levels.

Per the National Confederation of Commerce, the recovery may be explained by the government’s emergency aid program, which propped up Brazilian’s purchasing power despite the increase in unemployment. However, they point out the monthly growth is expected to slow down in next month, in comparison to the current pace.

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